You frequently hear people say we can’t do that because there’s no money – nothing in the budget, nothing available. I think it’s important to understand that’s nonsense. All it means is that we’ve been protecting some people from paying their share. The budget is what we make it. It is not some giant dam blocking us from sensible decisions.
We’re often told in response that the rich pay 70% of taxes. But that is completely misleading because their tax burden is much smaller than it is for the rest of us.
When we tried to have banks report more deeply on bank transfers, the activity that is the basis of the wealth of the truly wealthy, there has been a hugh hue and cry that we couldn’t do that, we couldn’t treat their wealth the same way we treat the wages of poor people. Only working people could have income withheld.Taxes could only come from wages, not from all the other forms of income that the rich get but that does not get taxed.
The IRS has been repeatedly prevented from looking more deeply at the income of large wealthy tax cheats – heaven forbid they should be subject to the same rules that govern the rest of us. Then we hear that it’s dangerous to tax the wealthy because they’ll leave and take all their money with them. That’s interesting. Their wealth comes from the domestic economy and it’s not theirs to take. They can leave but they’ll be bankrupt without the sources of their income. And I’d suspect that, for most, their wealth is based on the vigor of the American economy. So, unless thay want to invest what they’ve got here, I see little benefit in encouraging them to stay. Let them leave behind what’s not theirs to take. We’d just as well do without them.
As Danny Yagan comments for the Stanford Institute for Economic Policy Research “Policymakers have adopted the principle that capital income should be taxed at lower rates than labor income.” That has two consequences. First, the tax burden falls on wages. Second, adding to the unfairness, top earners find ways to disguise their labor income as “capital” income.”
An enormous chunk of tax avoidance consists of “private-company entrepreneurs working below the public radar.” Id. Republicans know what they’re doing when they prevent the IRS from looking into the income of the super wealthy. But the result is that we have to pay their taxes.
So of course there’s nothing left to take care of the rest of us – that would require the rich paying their taxes. So “the richest among us too often end up paying a smaller percentage of their income to the federal government than most working families.” For example, from 2014-2018 the 25 richest Americans paid a mere 3.4 percent on their billions in income, which is a “true” tax rate far less than the average American pays. “That’s not paying your fair share.” Id.
America is a large economy and there’s plenty here to do what we ought to be doing.
People who work with their hands and backs or who are out of work don’t deserve all the names Trump has for them. I’d encourage Mr. Trump to learn the difference between caring about each other and the garbage pit of names he likes to use for everyone else.
Steve Gottlieb’s latest book is Unfit for Democracy: The Roberts Court and The Breakdown of American Politics. He is the Jay and Ruth Caplan Distinguished Professor Emeritus at Albany Law School, served on the New York Civil Liberties Union board, on the New York Advisory Committee to the U.S. Civil Rights Commission, and as a US Peace Corps Volunteer in Iran. He enjoys the help of his editor, Jeanette Gottlieb
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