Highbrow Magazine - jeff bezos https://www.highbrowmagazine.com/jeff-bezos en Tax Justice: Democrats’ Plans to Make the Wealthy Pay More https://www.highbrowmagazine.com/12584-tax-justice-democrats-plans-make-wealthy-pay-more <div class="field field-name-field-cat field-type-taxonomy-term-reference field-label-hidden"><div class="field-items"><div class="field-item even"><a href="/news-features" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">News &amp; Features</a></div></div></div><span class="submitted-by">Submitted by tara on Mon, 09/20/2021 - 15:49</span><div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://www.highbrowmagazine.com/sites/default/files/styles/large/public/field/image/1taxes_donkey_hote-flickr.jpg?itok=ZuMZIXNS"><img typeof="foaf:Image" src="https://www.highbrowmagazine.com/sites/default/files/styles/large/public/field/image/1taxes_donkey_hote-flickr.jpg?itok=ZuMZIXNS" width="480" height="360" alt="" /></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"><p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">Demanding tax increases on the rich is back in fashion – both in the corridors of the House of Representatives and on the red carpet of the Met Gala.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">The House Ways and Means Committee outlined plans on Sept. 13, 2021, to move the top marginal income rate up a couple of notches to 39.6 percent and to introduce a 3 percent surtax on incomes above $5 million. That proposal would fall short of calls to really “tax the rich,” as Rep. Alexandria Ocasio-Cortez’s dress demanded at a glitzy New York bash just hours later.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">Tax policy is deemed progressive if the chunk of income taken increases with the income of the individual – so wealthy Americans would pay a larger proportion of their income than poorer ones. With a regressive tax policy, lower earners pay a larger percentage of their earnings in tax than wealthier ones. The committee’s plan would roughly put tax progressivity back to where it was just before President Trump signed off on Republican tax cuts in 2017.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">That would still be far below the level of progressivity the United States embraced in the middle of the 20th century – when wealthier individuals paid a much higher share of their income in taxes than the poor.</span></span></p> <p> </p> <p><img alt="" src="https://www.highbrowmagazine.com/sites/default/files/2tax_philip_taylor-flickr.jpg" style="height:450px; width:600px" typeof="foaf:Image" /></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">In 1950, when looking at all federal, state and local taxes, the top 0.01 percent of earners paid almost 70 percent of their income in taxes. In the postwar decades, corporate profits – the main source of income for the rich – were subject to an effective corporate tax rate of 50 perent. Meanwhile, the rich were subject to high tax rates on wages, dividends, interest and income from partnerships.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">The progressivity of the U.S. tax system has dramatically declined over the past seven decades. The upshot is that for most income levels, the U.S. tax system now resembles a flat tax that becomes regressive at the very top end, meaning the super-rich pay proportionately less. Today, virtually all income groups pay roughly 28 percent of their income in taxes – except for the 400 richest Americans, who each own more than $2 billion in wealth today and pay around 25 percent in taxes.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">Working-class and middle-class Americans pay a substantial amount of taxes because of payroll taxes, which are high and barely affect the rich, and state and local sales taxes, which are regressive – they take a bigger chunk out of a smaller wage than out of a large income. Even households that pay no federal income tax because of low earnings hand over a percentage similar to that of wealthier households, because of these other taxes.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">The super-rich’s low tax rates of today are in part aided by the collapse of federal corporate taxation. In the 1950s, 5 percent to 7 percent of national income came from corporate taxes. By 2018, that figure had fallen to just 1.5%.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">The effective tax rate collapses for billionaires further because they can avoid reporting individual income by instructing their companies not to pay dividends and holding on to their shares without realizing their gains.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif">The proposal unveiled by House Democrats would increase taxes on millionaires significantly. But it would largely leave billionaires off the hook, despite the explosion of their wealth during the pandemic. More ambitious proposals in the Senate would tax their unrealized capital gains. In our view, this would be a bold addition that would help the United States reconnect with its tradition of tax justice.</span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><strong><em>This article was originally published in <a href="https://theconversation.com/tax-the-rich-democrats-plans-to-make-the-wealthy-pay-a-little-more-will-barely-dent-americas-long-slide-from-progressive-taxation-168057" style="color:#0563c1; text-decoration:underline">The Conversation</a>. It’s republished here with permission under a Creative Commons license. </em></strong></span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><strong>Author Bios:</strong></span></span></p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><strong><em>Gabriel Zucman is an Associate Professor of Economics at the University of California, Berkeley.</em></strong></span></span></p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><strong><em>Emmanuel Saez is a Professor of Economics at the University of California, Berkeley.</em></strong></span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><strong>Highbrow Magazine</strong></span></span></p> <p> </p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><strong><em>Image Sources:</em></strong></span></span></p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><em>--Donkey Hotey (<a href="https://search.creativecommons.org/photos/7180006d-b416-47b6-9987-74903a8dbd5b" style="color:#0563c1; text-decoration:underline">Flickr</a>, Creative Commons)</em></span></span></p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><em>--Philip Taylor (<a href="https://search.creativecommons.org/photos/63567eef-80a4-4c92-aad4-a7939b73fcbb" style="color:#0563c1; text-decoration:underline">Flickr</a>, Creative Commons)</em></span></span></p> <p><span style="font-size:18px"><span style="font-family:Times New Roman,Times,serif"><em>--Steve Jurvetson <a href="https://www.flickr.com/photos/44124348109@N01/5129303018" style="color:#0563c1; text-decoration:underline">(Flickr</a>, Creative Commons)</em></span></span></p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-above"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/taxes" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">taxes</a></div><div class="field-item odd" rel="dc:subject"><a href="/taxing-rich" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">taxing the rich</a></div><div class="field-item even" rel="dc:subject"><a href="/personal-income" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">personal income</a></div><div class="field-item odd" rel="dc:subject"><a href="/democrats" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Democrats</a></div><div class="field-item even" rel="dc:subject"><a href="/tax-cuts" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">tax cuts</a></div><div class="field-item odd" rel="dc:subject"><a href="/tax-law" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">tax law</a></div><div class="field-item even" rel="dc:subject"><a href="/wealthy-americans" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">wealthy Americans</a></div><div class="field-item odd" rel="dc:subject"><a href="/tax-cuts-and-jobs-act" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">tax cuts and jobs act</a></div><div class="field-item even" rel="dc:subject"><a href="/jeff-bezos" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">jeff bezos</a></div><div class="field-item odd" rel="dc:subject"><a href="/warren-buffet" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">warren buffet</a></div><div class="field-item even" rel="dc:subject"><a href="/bill-gates" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">bill gates</a></div><div class="field-item odd" rel="dc:subject"><a href="/mark-zuckerberg" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">mark zuckerberg</a></div><div class="field-item even" rel="dc:subject"><a href="/billionaires" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">billionaires</a></div><div class="field-item odd" rel="dc:subject"><a href="/paying-taxes" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">paying taxes</a></div></div></div><div class="field field-name-field-author field-type-text field-label-hidden"><div class="field-items"><div class="field-item even">Gabriel Zucman and Emmanuel Saez</div></div></div><div class="field field-name-field-pop field-type-list-boolean field-label-above"><div class="field-label">Popular:&nbsp;</div><div class="field-items"><div class="field-item even">not popular</div></div></div><div class="field field-name-field-bot field-type-list-boolean field-label-above"><div class="field-label">Bottom Slider:&nbsp;</div><div class="field-items"><div class="field-item even">Out Slider</div></div></div> Mon, 20 Sep 2021 19:49:16 +0000 tara 10635 at https://www.highbrowmagazine.com https://www.highbrowmagazine.com/12584-tax-justice-democrats-plans-make-wealthy-pay-more#comments