Seattle’s member of Congress, Rep. Pramila Jayapal, has introduced a bill to tax the wealth of America’s richest people, not just their incomes. The aim is to deal with a big flaw in the nation’s system of taxation; while vast amounts of wealth are being generated in the U.S. economy, a huge share of it goes to a very small number of people who pay a tiny percentage in taxes compared to middle class Americans.
Some of this under taxation is due to the fact that rich people have lawyers and money managers who are very adept at evading taxes or finding loopholes in the law. But a big part of it is due to the fact that, while most of us are on someone’s payroll, the wealthiest folks get only a small portion of their net worth from a salary. Instead, their vast fortunes come from investments which are not treated as income.
A well paid worker can be taxed at a rate as high as 37%, but, according to a ProPublica investigation, the 25 richest Americans paid an average of only 15.8% in taxes. Some, including Amazon founder Jeff Bezos, Tesla boss Elon Musk and financier George Soros have paid zero income tax in some years, ProPublica discovered.
Meanwhile, the combined wealth of those 25 richest people increased by $401 billion from 2014 to 2018 at the same time that millions of average folks saw little increase in their incomes.
I do not begrudge the super rich their yachts, private airplanes and multiple mansions. Many of them have said it is only right that they should pay more in taxes than they do. But they are not going to send a check to the government just to be nice. A method other than the income tax needs to be found to get a fair share of the country’s enormous wealth so that we can pay for roads and bridges and scientific research and better schools and a host of other needs.
Right now, we are very rich nation that is looking awfully shabby. Jayapal’s plan, or something like it, may be a path to sprucing things up for everyone.
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