Editor’s note: ImpactAlpha contributing editor Napoleon Wallace is a co-founder of GOOD TRBL, Partners in Equity, Activest and other companies and organizations. He is the subject of ImpactAlpha’s award-winning mini-documentary, “Equity and Ownership: Napoleon Wallace and the Reconstruction of Black Wealth.”
If the One Big Beautiful Bill making its way through Congress does one thing, it supercharges the hype machine of extractive capitalism.
Delivering sweeping tax cuts, corporate giveaways, and a fresh wave of supply-side policies, the next tax bill is forecasted to add $2.4 trillion to the national debt over 10 years
If it does two things, it shifts the cost of that extraction onto America’s most vulnerable. The gutting of safety net programs and burdening what remains with onerous work requirements shafts even many Trump voters who may have believed he actually cared about their well-being.
For millions of Americans, the cost of “belonging” to the economy isn’t measured in opportunity. It’s measured in fees, evictions, interest rates and burnout.
This is the cost we pay: not a hand up, but a push down. From prison beds to payday loans, being poor in America isn’t just hard. It’s profitable — usually for someone else.
The nonpartisan Congressional Budget Office estimates that the hurdle of work and citizenship requirements could strip Medicaid coverage from 8.7 million people and lead to 7.6 million more uninsured people over 10 years.
While shifting the burden of tax cuts to our most vulnerable is troubling, it’s not new. Time and time again we see that rhetorical logic like “no handouts,” leads to poor policies which leads to perverse incentives.
In the case of safety-net work requirements, we end up with corporate success that comes with hidden price tags, as exemplified by Walmart, our nation’s largest private employer. Walmart’s low-wage strategy has resulted in over 1.4 million of its employees (or 10% of working SNAP and Medicaid recipients) relying on public assistance to make ends meet. In 2015, this dependency cost taxpayers an estimated $6.2 billion annually—nearly one-third of Walmart’s net income at the time. As recently as 2020, Walmart was among the top four employers of workers receiving SNAP and Medicaid benefits, according to the General Accounting Office. Walmart raised its hourly wages to $18 an hour in 2023.
Rather than internalizing the costs of fair wages and benefits, Walmart pushed the balance of these responsibilities to taxpayers. Or our politicians thrust the costs of tax cuts onto our most vulnerable. Either way, publicly funded programs, designed as safety nets, have become de facto subsidies for companies’ labor costs.
That highlights a stark truth: Businesses often thrive not despite their ability to externalize costs, but because of it.
The reliance on public assistance isn’t something Walmart created. It’s a systemic issue that raises urgent questions about fairness, accountability and cruelty as a competitive advantage. As with most companies, Walmart is simply playing by the rules as they are written—and this is the crux of the problem.
American capitalism has never stopped at extracting land, labor, or oil. It has always extracted dignity, health, and hope.
Weaponizing municipal budgets
Profiting from poverty extends back 150 years, to the end of the Reconstruction that followed the Civil War. From the founding of America through the evolution from slavery to the prison-industrial complex, that approach walked a straight line.
In the post-Civil War South, Black Codes criminalized joblessness, vagrancy, and other conditions of poverty, effectively legalizing the re-enslavement of freed Black Americans. Those laws laid the foundation for convict leasing—state-sponsored forced labor marketed to private industry.
Today’s over-policing of low-income and immigrant neighborhoods, surveillance of immigrant communities, and use of municipal debt to fund jails all echo this legacy. The common thread: Extraction masked as enforcement.
For example, Ferguson, Missouri showed the world what happens when municipal finance collides with racial inequity. After the city’s demographic flip from majority-white to majority-Black, its white-led government increasingly relied on fines and fees—over 23% of city revenue at one point—mostly extracted from Black residents. A U.S. Department of Justice report revealed 85–90% of traffic stops targeted them.
This wasn’t just racial profiling. It was fiscal occupation.
After the police killing of Michael Brown, municipal bonds tied to Ferguson lost half their value. The market corrected for racial injustice—long after residents had paid the price.
Activest.org emerged from this reckoning. As a research and advocacy effort, it built tools for investors to assess municipal debt through a fiscal justice lens. Today, via its partnership with Next World Assets, Activest manages fiscal justice fixed income portfolios that allow investors to divest from extractive public finance strategies—like excessive policing and punitive fines—and reinvest in communities through better bond oversight (disclosure: I am a co-founder of Activest and a partner in Next World Assets).
The thesis is direct: Governments that criminalize poverty and underinvest in communities based on race are fiscally unsound. Investors are now backing that argument with capital. The Kataly Foundation, in collaboration with Activest and other partners, is building an equitable bond strategy to ensure that public finance aligns with fiscal justice benchmarks. Their approach doesn’t just critique municipal debt—it rewrites the rules.
By prioritizing municipal issuers that invest in housing, education, and mental health—not jails and militarized policing—Activest is helping philanthropists and investors use “boring” municipal finance as a tool for systemic change.
Capital punishment
In the U.S., poverty doesn’t just correlate with incarceration—it compounds it.
Over 1.9 million people are locked up across the country, with more than 90,000 held in private, for-profit prisons and immigration detention centers. These institutions don’t exist to correct behavior—they’re calibrated for revenue. Bed quotas are written into contracts. Occupancy drives margins. Retention outpaces rehabilitation.
This is carceral capitalism, where punishment scales. Youth of color, particularly Black teens, are overrepresented for minor infractions in facilities run as businesses. A 15% share of the youth population, Black adolescents make up 35% of juvenile detainees.
In 2021, activists in Alabama derailed a multi-million-dollar plan to build private prisons funded by state bonds—underwritten by Barclays. The protest didn’t end at rallies. It hit the underwriting pipeline.
Barclays pulled out. That’s what modern movement finance looks like: pressure campaigns designed not just for public opinion but for financial disruption.
Groups like FreeCap Financial are expanding this playbook—tracking corporate exposure to the prison economy and providing investors with real-time data to divest. It’s abolition via analytics: targeting systemic injustice not just morally, but through materiality. By quantifying carceral risk, they help investors divest from extractive supply chains and reallocate capital toward more sustainable business practices. This is modern abolitionist finance: using data not just to score companies, but to shrink systems of harm.
Poverty finance
High-cost lending doesn’t serve the poor—it strips them.
In Black and Latino neighborhoods across the South and Midwest, payday lenders cluster, often two to three times more dense than in white areas, even after adjusting for income. It’s not coincidence. It’s targeted design—what experts call “reverse redlining.”
Average payday loan average percentage rates, or APRs, top 390%. Each year, these products extract more than $7 billion from low-income borrowers.
Hope Credit Union and partners like the Center for Responsible Lending are building alternative capital pathways. This is not just a social good, but a market correction to exploitative finance.
Hope offers an alternative to payday loans and extractive financial products that strip wealth from Black and Latino communities. With branches across the deep South, HOPE not only provides affordable credit—it works with catalytic capitalists, mission-aligned foundations and development-minded banks to underwrite inclusion.
Pollution, policy and profit
In North Carolina, Black and Indigenous communities organized in the 1980s and 1990s against industrial hog farms that poisoned land and water. The state’s response was not to regulate. Instead, it restricted lawsuits.
Environmental protection was privatized. Clean-up and health costs were socialized. Profitable externalities were monetized.
The legislation that enables America’s environmental injustice habit may be penned in Washington, D.C., but it starts in the communities where waste is dumped and profits are secured.
Black North Carolinians are thrice as likely to live near hog waste lagoons and face disproportionate exposure to cancer-causing pollution. Similar disparities have been priced into the landscape in places like Louisiana’s Cancer Alley, driving down wages and asset values while increasing health costs and borrowing costs.
It takes pioneers like the Greenlining Institute and its coalition partners to push back on the inertia of pollutant profiteering. The Institute is advancing clean energy and climate infrastructure in neighborhoods historically targeted by environmental harm. From grid modernization to EV charging access, it offers models ensure that climate investment does not replicate redlining, but reverses it.
Belonging without the surcharge
Poverty in America is more than a condition. It’s a business model. From policing to pollution, debt to detention, exclusion has become a strategy to generate profit.
Life expectancy gaps tell the story. The richest Americans live 10 to 15 years longer than the poorest. Depression and anxiety rates are higher in low-income populations here than in peer nations, due to financial precarity and policy neglect.
Systems built to extract can be redesigned to repair. The innovations outlined here are not pilot programs or soft philanthropy. They are scalable, investable, measurable and impactful. Together, they outline a future where capital isn’t extractive—it’s restorative.
Belonging should never carry a surcharge. And investing in the potential of those who just need a fair shot tends to pay off.
