The wealthiest Americans have seized an unconscionable share of the country’s wealth and income, and both parties have broken their promises to close the gaps. Worse, Trump’s new tax law will drastically widen these gaps further at the expense of middle- and low-income income earners.
It’s time to take back what the rich have pilfered with a new wealth tax. Once passed, Americans would no longer have to depend on politicians’ empty rhetoric about creating an economy that works for all Americans.
The bottom 10% of Americans’ share of wealth is negative. For the bottom 20% it’s $13,500. It’s over $3 million for the top 5% and $13,000,615 400 for the top 1%. Although Americans with low-wage jobs may pay a lower income tax rate than the wealthy, they pay a much higher percentage of their wealth in taxes.
President Biden’s promise to reduce income and wealth disparities never materialized because House Democrats chose to spare the rich. Trump bragged that he did a fabulous job incomes and wealth of called “America’s Forgotten Men and Women.” Nope, Under Trump, the share of total income going to the prosperous and wealthy grew by a whopping 17 percent while the poor got poorer.
These gaps are predominantly the result of decades of tax cuts configured to favor the rich who exercise an outsized amount of control over who wins elections. So they elect candidates who have cut income, corporate, and estate taxes, and increase payroll taxes on working Americans to replace some of the lost tax revenues.
Although the very wealthy have massively out funded the election campaigns of Republicans, Democrats have done little to mitigate the wealth and income inequality Republicans have created. Billionaires disproportionately benefit from tax cuts. The Republican tax-cutting agenda can save billionaire-family donors trillions of dollars in taxes. So their campaign funding heavily favored funding Republicans. 70% of billionaire-family contributions went to support GOP candidates while 23% backed Democrats. Out of the top ten billionaires, eight of them donated $863 million to Republicans while the other two contributed $92 million to Democrats.
The second Trump administration saw a shameful and unprecedented buying of political appointments to an unqualified an dangerous cabinet such as wrestling tycoon Linda McMahon to Secretary of Education–charged with dismantling her department, and billionaire investment banker Howard Lutnick was made Commerce Secretary after contributing over $21 million to Republican campaigns.
Although many countries have repealed their wealth taxes, a wealth tax in the U.S. would have a more salutary effect due to America’s largest wealth and income gaps of all industrialized countries.
Designed well, a wealth tax would reduce inequality and the wealthiest Americans would finally pay their fair share of America’s taxes. And to favor Americans not in high wealth and income categories, it would exclude residences worth less than a $1 million, 401K portfolios, Social Security benefits and businesses in which the owner is actively involved.
By setting an exemption threshold on net worth, households below that threshold won’t have to pay the tax. An appeal of a wealth tax is that it can raise substantial revenue while increasing taxes on a small share of the population.
There are many iterations of how the tax would work. For example, if all taxable assets greater than $50 million ($25 million for unmarried filers) were subject to a 1 percent tax, the tax would raise nearly $2 trillion over 10 years, and about 86 percent of the tax would be borne by the top 1 percent of earners.
Increasing the tax rate to 2 percent for assets above $100 million ($50 million for unmarried taxpayers) would further increase tax revenues by another $1 trillion.
These revenue estimates are reduced by about 45 percent if the tax base excludes pension benefits, housing values under $1 million, and businesses in which the owner is actively involved.
A poll commissioned by the New York Times in July 2019 found that two-thirds of Americans favored a 2 percent tax on net wealth over $50 million.
Although there are many challenges to the implementation of a wealth tax, the Tax Policy Center has weighed in and concluded that it’s feasible.
Alarmingly, Trump’s “big, beautiful tax law will further increase the concentration of wealth and influence among the richest Americans. And the spineless Congressional Republicans knowingly enabled Trump so he won’t endorse candidates to run against them in the primaries. And the Democrats have been powerless to stop him. So its up to the voters to replace Trump them with either Republicans not intimidated by Trump or with Democrats in the midterms.
