Editor’s Note: Abigail Disney is an Emmy Award-winning documentary filmmaker, activist, and member of the Patriotic Millionaires Association. Her latest film, “The American Dream and Other Fairy Tales,” co-directed with Kathleen Hughes, had its world premiere at the 2022 Sundance Film Festival. Morris Pearl is president of the Millionaire Love Foundation. country and a former CEO of BlackRock. The opinions expressed in this commentary are their own. See more comments on CNN.
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Tuesday is Tax Day in the US, one of the most stressful days of the year, when many taxpayers will finally put an end to procrastination, file their federal tax returns and hope for a refund from the IRS. But for many of the nation’s richest people, it’s just another Tuesday.
Tax Day isn’t just a filing deadline – it’s an annual reminder that the super-rich exist in a completely separate world when it comes to taxes. For us, the holes are bigger and the rates are sometimes lower. Meanwhile, the rich continue to get richer, with richness of billionaires in particular has grown by more than $1.5 trillion over the past few years.
This status quo is unfair, but more importantly, it is not sustainable. Such high levels of inequality are pushing our economy and democracy to breaking point. That is why we should consider how we can set up our country for long-term stability and prosperity. And we should start by making sure the super-rich pay more than they owe the country that made them successful.
There are three changes to the tax code that will help us with that:
Right now, the US tax system values money more than sweat. If you work hard to make money instead of earning it passively, you will essentially be penalized for it. Wage earners pay significantly higher taxes on their earnings than wealthy investors earn passively capital increase income.
Inheritance of money is an even better deal. Thanks for the year 2017 of former president Donald Trump tax lawThe first $12.92 million (or $25.84 million for a married couple) is completely exempt from any property taxand Enhanced Basic Vulnerability allows wealthy families to permanently erase millions of dollars in capital gains taxes by resetting the market value of those properties to their value at the time of the original owner’s death. With this, it becomes relatively simple for the rich to inherit tens or even hundreds of millions of dollars and pay almost no taxes. On the other hand, someone working for that money will pay more than a third of that in federal income taxes.
Why do we have a tax law that says working people should be taxed more than wealthy investors and those who became rich by being born into a worthy family? At the end of the day, money is still money, whether you work for it or you inherit it. As heirs and investors, we should not pay less taxes than those who make money from work.
The time has come for the tax code to treat all income equally by taxing all capital gains over $1 million at the same rate as ordinary income and replacing the loopy estate tax of we by inheritance tax simply consider inheritance as income.
However, we can’t just focus on income, because many of the richest Americans essentially earn no taxable income of any kind in a typical year. Capital gains are only taxed when properties are sold, so instead of selling them, the super-rich use their assets as collateral to borrow large sums of money at extremely low interest rates to live on. then declare little or even negative “income”. on their tax forms. This “Buy, Borrow, Die“strategy is a major reason billionaires pay a lower effective tax rate in recent years than working-class families.
By rethinking what is taxable, we can access trillions of dollars in wealth that our current tax structure cannot reach. That’s why President Biden proposed Billionaire minimum income taxthis would tax the unrealized capital gains of the wealthiest households and why others have proposed a wealth tax on billionaires.
Finally, one of the simplest changes needed is to tax the extremely wealthy more than those who are just rich. Ours Income Tax capped at 37% on any income over $578,125 (or $693,750 for couples). No matter how much someone earns, they will never pay more than 37% in federal income tax.
While someone earning $600,000 is certainly enough to live a very comfortable life, they are in a different world from those making $600 million a year. To reflect the real difference between the rich and the super rich, we need to go back Highest price we went through the most prosperous decades of the 20th century and added significantly more tax brackets. They will go up to 90% for those making more than $100 million a year.
These three changes will certainly not solve all of our country’s problems on their own, but they will be of great help in stemming the steady flow of our country’s wealth towards a small group of people today. the smaller, a change that will make both our democracy and economy more stable. Tax codes can be a powerful tool for both economic and social change. We just need to use it more efficiently.
