It’s no surprise that the wealthiest Americans get a passport that challenges the theory that if we give more tax breaks to rich people, they will give the rest of us more generously and the country will be more prosperous.
This has been the trend since President Ronald Reagan’s “supply economy”, also known as the “trickle-down” economy, lowered the nominal tax rate to 28%.
In 2017, Donald Trump even cut it down to a whopping 21%.
But thanks to legislation that creates ample loopholes, those who should pay even that 21 percent get away with parting with a single penny.
Over the past 20 years, CEOs have grown on average 350 times more than their employees.
According to a recent Treasury Department watchdog report, the IRS has failed to collect more than $ 38.5 billion from taxpayers with annual incomes over $ 200,000 and more than $ 2.4 billion from those with incomes of to collect over $ 1.5 million.
The pandemic only made it worse.
According to last year’s analysis by Americans for Tax Fairness and the Institute for Policy Studies, American billionaires’ fortunes grew by an average of $ 42 billion each week from the COVID-19 pandemic, totaling more than $ 700 billion since the 18th date that the analysis indicates as the first official day of the pandemic emergency.
The total wealth of the 651 richest billionaires rose by more than $ 1 trillion during the pandemic.
Now we have yet another report from ProPublica that reveals leaked IRS tax returns showing that the richest 25 Americans enjoyed $ 400 billion in profit between 2014 and 2018 while paying a 3.4% tax rate.
Jeff Ernsthausen, a senior data reporter at ProPublica, stated in an interview with Democracy Now! This week:
“Typical wage earners like you or me pay taxes every time we get a paycheck. But for the ultra-rich it’s a completely different story. “
Characters in this story include Berkshire Hathaway billionaire Warren Buffett, who famously complained that he pays a lower tax rate than his secretary.
Unless his secretary paid less than 0.1%, that’s true.
As Jeff Ernsthausen explained:
“Warren Buffett is one of the best examples of how this works, so to speak. So Berkshire Hathaway is known to not pay a dividend. And because of that, Warren Buffett’s income as a major Berkshire shareholder is relatively low each year for someone with as much money as him. And so, in the five years we focus our history, his fortune has skyrocketed tens of billions of dollars and he has paid millions in taxes. And that’s because his company is structured in such a way that he never actually realizes those profits in the way the US tax system recognizes. “
His fortune has skyrocketed to $ 24 billion.
The wealth of the world’s richest person, Amazon.com founder and CEO Jeff Bezos, rose nearly $ 65 billion last year during the pandemic.
Bezos did not pay federal income taxes in 2007 and 2011, according to the ProPublica report.
Jeff Ernsthausen added:
“The example of Jeff Bezos is a good example of this. Between 2006 and 2018, his net worth grew by nearly $ 130 billion. During that time, he paid on the order of $ 1.4 billion in taxes, which sounds like a lot, but it’s nearly one percent of the amount that made his fortune soar. And so in a few years he had a very – you know, a very low income and so ended up paying almost nothing in taxes and in a few years nothing at all.
Tesla and Space X founder Elon Musk – the second richest person in the world – did not pay federal income taxes in 2018.
The richest people in America don’t pay income taxes.
Warren Buffett 0.10%
Jeff Bezos: 0.98%
Elon Musk: 3.27%
Ordinary Americans pay 20% +. It’s just amazing how manipulated the system is. Let’s fix it.
– Chris Murphy (@ChrisMurphyCT) June 8, 2021
George Soros – the most popular “democratic mega-donor” of the right-wing hate media – did not pay federal income tax for three years in a row.
Former NYC Mayor (and short Democratic presidential candidate) Michael Bloomberg skipped a year on his taxes.
For 2017, he paid $ 70.7 million in federal income taxes but claimed $ 1.9 billion in income.
This corresponds to a tax rate of 3.7%.
Investor Carl Icahn was able to bypass federal income tax in 2016 and 2017 by deducting substantial interest payments on his company’s debts.
Asked about the White House’s reaction to the explosive report, the press secretary said Jen Psaki told The Washington Post:
“TMore needs to be done here to ensure that corporations, the highest income individuals, are paying more of their fair share. Hence it is in the President’s proposals. His budget and part of how he wants to pay for his ideas will continue. “
However, that didn’t stop the Biden government from conducting an investigation into the source of the leak instead of following the laws, policies, and financial regulations that allow high-tech piracy.
This only confirms the need for a wealth tax like that “Ultra Millionaire Tax Act“Said Mass. Sen. Elizabeth Warren earlier this year.
Their bill stipulates an annual two percent tax to households and trusts with net worth between $ 50 million and $ 1 billion and a three percent tax on everything above.
When a Health insurance for everyone Single payer If the national health plan is passed, the three percent would be over a billion increase to six percent.
Warren’s bill includes a provision granting an additional $ 100 million to the Internal Revenue Service (IRS), require a 30 percent minimum audit rate for taxpayers and create one 40 percent tax on $ 50 million net worth for individuals giving up US citizenship to avoid payments.
According to Warren’s plan, Jeff Bezos would owe $ 5.7 billion.
Elon Musk would owe it $ 4.6 billion and still have over $ 148 billion at the end of the year.
Bill Gates would have to pay $ 3.6 billion.
Facebook boss Mark Zuckerberg, $ 3 billion.
In 2018, the Internal Revenue Service (IRS) raised $ 3.5 trillion in taxes, nearly 95 percent of total federal revenue.
But there are also a lot of taxpayers do not pay By the filing deadline, known as the tax loophole, the IRS estimates an average of $ 441 billion per year between 2011 and 2013.
Recent research from Harvard University shows that those responsible for 70 percent of this tax gap are the richest percent of income earners.
That means the richest Americans – who many believe they pay most of the taxes as they should – are robbing the American public of about $ 266 billion.
Credit: Congress budget office through TMI
Vt. Sen. Bernie Sanders stated:
“With the money these tax evaders owe, we could finance a fee-free college for everyone this year alone, eliminate child hunger, provide clean drinking water for every American household, build half a million affordable housing units, make masks available to everyone, produce the protective equipment and medical supplies our health workers need to fight this pandemic; and fully fund the U.S. Postal Service. This is an absolute cheek and this report should make us look closely at what our national priorities are about. “
The rich will still be rich.
Unless there is progressive taxation where the rich pay according to their wealth, they will not get rich in an increasingly poorer country.
Ted Millar is a writer and teacher. His work has been featured in countless literary magazines including Better Than Starbucks, Caesura, Circle Show, Cactus Heart, and Third Wednesday. He’s also contributing to The Left Place Blog on Substack, Liberal Nation Rising, and Medium.