This article originally appeared on Dean Baker’s Patreon. It is reprinted here with permission.

Virtually everyone who is not a billionaire, or owned by one, agrees that we have to limit the ability of the rich to buy elections. While the Republican Party has taken “policy for sale” politics to a new level, there are plenty of Democrats who have been happy to support obviously awful policy in exchange for contributions from the AI industry, the pharmaceutical industry, the crypto industry, and Wall Street more generally. It costs a lot of money to run a competitive campaign and it’s hard to raise that from small contributions, so there will always be a temptation to bend policy positions to get some serious money.

While most people favor limits on campaign contributions, the current Supreme Court has made this very difficult. They have ruled that campaign contributions are speech and therefore any effort to limit campaign contributions is an unconstitutional restriction on speech.

There are some promising alternative paths that focus on making small donors matter. Seattle has a system of “democracy vouchers” that give every voter in local elections a modest sum that they can contribute to a candidate(s) of their choice. To qualify to get the vouchers, candidates must agree to limits on spending and large contributions.

Super-matches are a comparable system. Under this system, small dollar contributions can be matched up to 8 to 1, which means that even a $50 contribution can make a difference to a campaign. New York City, along with several other cities, have gone this route.

While these paths for amplifying the voice of ordinary people are promising, it will take much more to match the power of the billionaires. It is important to realize they exercise their political power in ways other than campaign contributions, primarily through their ownership of the media.

The importance of billionaire ownership goes far beyond the constant stream of lies and right-wing propaganda from Fox News. Last year, the very Trumpy Ellison family took control of CBS and immediately began to shift its news to the right. They are now taking control of CNN through the merger of Paramount and Warner Brothers. They also got control over TikTok, after Trump wrestled it away from a Chinese company for them.

Trumper Mark Zuckerberg owns Facebook and Instagram and is not shy about banning political material he doesn’t like. And Elon Musk bought Twitter, explicitly to advance his right-wing agenda. The rest of the media landscape doesn’t look much better. The rich and very rich own the countries’ newspapers and broadcast outlets, and most of these people lean right, even if they have not yet joined the Trump Reich.  

And let’s just be clear. The idea that the campaign ads bought by the rich can influence votes, but not the material that people see between the ads, is beyond absurd. Even if we banned all political contributions from rich people and corporations, the rich could still control elections by showing us nothing but their propaganda on television, in newspapers, and on social media.

This is why the Community News Act that Governor Gavin Newsom just signed is so important. The measure provides $20,000 each for up to five journalists per news outlet covering local news. This subsidy can keep newspapers and news sites across the state in business and help to support new ones that might start up. It is similar to other programs that have been started in Illinois, New York, and New Mexico.

This might seem like small change in a world with multi-billion dollar media empires, but it is not realistic to imagine matching the super-rich dollar for dollar; the goal is to sustain reality-based reporting that people can rely upon. (Repealing Section 230 protection for the mega-platforms like Facebook and X would be a big step towards leveling the playing field.) And support for local news reporting is likely to also lead to better national and international reporting, both by training more reporters and also increasing the comfort level with public funding, perhaps opening the door for a national system.

To be clear, there are no political conditions attached to this funding. Conservative news outlets are as eligible for this subsidy as more liberal ones. The point is to support local journalism, not to favor a particular political perspective.

To my view, this system is not ideal. I prefer support coming through an individual refundable tax credit to support local news. This would allow people to have a more direct attachment to the news outlets being supported with public money. Ideally, this would give them a sense of ownership that many feel towards other community organizations.

But whether or not this is the best approach, there is no doubt that the California bill, along with the ones already passed in other states, are big steps forward. It will help to reverse the collapse of local news reporting, which is giving corruption free rein in many areas. We need to build on the positive and make it better, rather than reject a plan because it may not be ideal. Progressive opponents of California’s wealth tax initiative may want to give that point some thought.

Twelve years ago, EU summit leaders announced they had a strategy to tackle unprecedented migrant arrivals.

Next week, they will meet again in Brussels and to tell us something similar.

We journalists will report on the latest twists and turns, hoping to get some sort of angle that hasn’t been covered. But the reality is that our leaders have broadly failed.

Dozens of EU summit conclusions have been published since 2015, when one around million Syrians arrived in Europe to seek protection.

We need stronger external borders to preserve the Schengen passport-free zone, they said. We need partnerships with foreign states to save lives. We need to step up deportations. We need a European solution.

All of these ideas and strategies have found a home in council conclusions, in various iterations, since 2015. All of them.

Some have actually panned out, including an EU migrant swap deal with Turkey and other deals with autocrats in Tunisia, Egypt and elsewhere. Others like internal reforms on asylum have also been delivered.

Yet the sense of urgency to tackle these issues continues because there is an obvious disconnect between what has been delivered, the promises made and the lived experience on the ground.

People still come. Some 80,000 arrived in the Spanish enclave of Ceuta end of July alone.

Many are still fleeing violence, war and economic hardships. Others are lured by the promise of labour in Europe by Europeans willing to exploit them.

I remember meeting a group of boys from Bangladesh on the Ocean Viking, freshly rescued in the middle of the night, asking when they would be able to start working in Italy.

One of them was still shaking with fear and sobbing, following a near death experience.

The European Commission is now claiming that the drop of irregular arrivals is due to their migration policy reforms, as if the fall of the murderous Assad regime in Syria had no discernible impact.

Perhaps some of that is true. But there is no disputing that Syrians accounted for over 100,000 irregular crossings in 2023, a year before Assad fell. It then dropped to around 6,000. Today, it is around 1,000, according to Frontex.

At some point, one has to wonder if these conclusions, repeated ad nauseam, is nothing but political theatre by a leadership that has run out of ideas.

Why would the European Union list the Islamic Revolutionary Guard Corps as a terrorist organisation in February, and then, seven months later, have its top diplomat sit down with the foreign minister of the government the Guard Corps defends?

At the UN General Assembly last month, EU chief diplomat Kaja Kallas met Abbas Araghchi, who served in the Guard Corps during the Iran–Iraq war.

Dutch prime minister Rob Jetten met president Masoud Pezeshkian, who in 2019 joined fellow parliamentarians in wearing the Guard Corps uniform to protest Washington’s terrorist designation of it. France, Italy, and Norway held meetings of their own.

These talks came less than nine months after Iranian security forces, on 8 and 9 January, killed protesters on a scale without precedent in the country’s modern history.

The human rights group HRANA has verified more than 7,000 deaths, and the UN special rapporteur warned that the toll may exceed 20,000.

In September, the UN fact-finding mission concluded that the crackdown amounted to crimes against humanity. Nor has the killing stopped: Iran Human Rights counted at least 532 executions in the first eight months of this year, including protesters arrested in January.

After a massacre, a foreign policy guided by European values should pursue one aim above others: making a repetition more costly for those who would order and carry it out.

Naming and shaming raises the reputational cost of repression, targeted sanctions raise its material cost, and delegitimisation raises the political cost of staying loyal to the regime.

They work only in combination, since sanctions without delegitimization tell the regime’s elite that their assets are at risk, but their standing is not.

EU vs US sanctions

Europe has used the first two instruments. The EU listed the Guard Corps in February and sanctioned additional Iranian officials for human rights abuses.

However, these measures target assets and individuals, while the government that presided over the killing keeps its seat at the top table.

The UNGA in New York showed how little the third instrument has been used.

The terrorist listing freezes the Guard Corps’ funds. Neither Araghchi nor Pezeshkian is on an EU sanctions list.

Yet it leaves a question unanswered: how far should the logic of a terrorist designation extend to the government that funds and publicly defends it?

Article 21 of the Treaty on European Union requires the Union’s external action to be guided by human rights and to be consistent.

Branding the Guard Corps a terrorist organisation in Brussels while posing for photographs with the government it defends in New York sits uneasily with that obligation.

This inconsistency is costly. In a study in foreign policy analysis, my co-authors and I examined how Iranians reacted to US sanctions. Comprehensive sanctions produced a rally around the government, even among reformists.

The 2019 designation of the Guard Corps, by contrast, produced almost no rally outside the regime’s hardliner core. Thus, targeted pressure on the security apparatus does not drive Iranians into its arms.

Handshakes, on the other hand, may give the apparatus exactly what targeted sanctions are meant to withhold: international legitimacy.

The photographs from New York reach two audiences.

The first sits inside the state: an officer deciding whether to fire on a crowd, or to step aside, weighs one question above most others, namely whether the regime will survive, and each of those photographs suggests an answer.

The second audience is the families of those killed, executed, and blinded since January. For them, the message is that Europe has moved on after eight months.

A picture is worth a thousand words

I am not against diplomacy. Kallas raised the sharp rise in executions with Araghchi, and Jetten raised human rights and Iranian actions on Dutch soil with Pezeshkian. Channels on shipping, detained Europeans, and de-escalation should stay open.

My objection concerns the level and the format: a meeting between leaders, photographed at the General Assembly with no public conditions attached, is not a technical channel.

Concerns voiced in private do not travel as far as the photograph, which signals normal relations with a government that has done nothing to earn them.

Four steps would help.

First, the Council should agree on a common line: contact at the technical and envoy level, and leader-level meetings only on public conditions, beginning with a halt to protest-related executions.

Second, human rights sanctions should move up the chain of command, to those who answer politically for the security forces.

Third, member states should invest in accountability that does not depend on Tehran, such as universal jurisdiction cases and evidence-sharing with the UN mission.

Finally, Europe should engage openly with Iran’s democratic opposition.

The EU has already decided, in law, what the Guard Corps is. Its leaders have yet to act accordingly. A massacre answered with sanctions in February and handshakes in September does not raise the cost of the next one. It lowers it.

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Every major technological shift reshapes not just the economy but the tax system that pays for it. When big corporations emerged, corporate and payroll taxes followed. When mass car ownership took hold, fuel duties emerged to pay for the roads it required. 

As AI shifts work from people to machines, it will force a rethink of who gets taxed, on what, and where. Nowhere is that question more urgent than in Europe, which funds the world’s most comprehensive welfare states primarily through taxes on work.

Taxes on work make up 51.5 percent of all tax revenue in the EU-27, according to the European Commission’s latest Taxation Trends data — a share that rose in 2024. These charges are taken straight from the payslip. They’re hard to avoid, and scale with employment.

AI, by replacing human work with software and machines, eats away at exactly this tax base. 

The International Monetary Fund (IMF) estimates that around 40 percent of jobs worldwide are exposed to AI. If that leads to fewer workers, it will also mean fewer payslips, pension contributions and social charges, weakening the revenue streams that fund Europe’s pension and healthcare systems. This is not a distant problem; the costs are already mounting.

Shift the burden to corporate profits

The obvious response is to shift more of the tax burden onto corporate profits, which will increasingly reflect the gains firms make by deploying AI instead of hiring workers.

Unlike a tax on machines and equipment themselves, a profit tax falls mostly on excess profits and need not distort investment. The case for shifting weight from payroll taxes to profits is strong and strengthens as AI replaces more workers with machines.

But profits, unlike payrolls, move. A company can locate its intellectual property in a low-rate jurisdiction — a pattern Europe knows well from decades of profits routed through Ireland and Luxembourg — and ensure that profits are booked far from where the jobs are lost. It is how the world’s largest technology and AI firms already operate.

Two-pillar answer

The Organisation for Economic Co-operation and Development’s (OECD’s) Inclusive Framework was designed to address exactly this: profits shifted across jurisdictions to avoid tax, and e-commerce allowed sales where firms have no physical presence. AI makes these reforms more urgent. 

Pillar One of the framework put forward by the Paris-based wealthy nations’ club addresses where a corporation is taxed. It shifts partial taxing rights for the largest multinationals away from where they are headquartered and toward where their customers and users are located. 

Still under negotiation, it would apply only to a handful of the largest firms, but many AI companies would qualify. 

These firms are concentrated in a select number of countries, very few of them European, but the displacement they cause, and the public services that displaced workers will require, will weigh heavily on European budgets.

Pillar Two of the OECD framework introduces a global minimum corporate tax of 15 percent on multinationals with revenues above €750m.

The EU moved first and furthest: Council Directive (EU) 2022/2523 made the minimum tax binding across the Union from 2024, and 22 of the 27 member states now apply it in full. The United States, notably, has not implemented the rules. 

Politics is undermining the fix

But the obstacles are real. US ratification of the OECD proposals is unlikely, and many of the largest companies are headquartered there. 

The pressure is already reshaping Europe’s own rules: under the G7’s June 2025 ‘side-by-side’ agreement, US-parented groups would be exempt from the EU’s minimum-tax rules: a carveout the European Commission confirmed in January 2026 and which several member states consider legally fragile. 

The Commission also dropped its proposed EU digital levy under US trade pressure, leaving a patchwork of national digital services taxes in France, Italy, Spain, Austria, and elsewhere.

Such exceptions and carveouts show that big-power politics can hollow out the framework. These reforms were designed to address the tax challenges for an AI-economy. They were good policy then. They are fiscal necessities now. Fairer corporate taxation will not be enough, but it is a start. 

Europe’s choice

The EU has instruments on the table, the BEFIT common corporate tax base and the proposed Corporate Resource for Europe, but both remain politically contested.

European governments that fail to act will be managing the social costs of technological disruption with a tax system built for the industrial age, while the profits that fund their rivals accumulate beyond their reach.

Even if Europeans work less, their needs for health care, pensions, and consumption remain. As wage-based contributions shrink, Europe must shift more of the tax burden onto corporate profits and close off the routes that let those profits move beyond the reach of the states bearing the costs of automation. 

Productivity gains may soften the arithmetic; they will not repeal it. The tax base must follow the economy. 

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