SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
A Real Plutocracy Prevention Act
Senator Sanders bill would put a brake on concentrated wealth
Sep 18, 2014
French economist Thomas Piketty made a sensation with his bestselling book about inequality, Capital In The Twenty-First Century. Piketty's big solution is for nations around the world to adopt a "global wealth tax" to reverse the dizzying wealth inequalities that have emerged in the last three decades.
In the U.S., however, the most immediate action we can take to prevent the growth of a wealth aristocracy is to defend and expand our estate tax -our nation's only levy on inherited wealth. Only multi-millionaires and billionaires pay the tax, fewer than one in 500 households.
The bad news is the estate tax is under assault. Republicans in the U.S. House have 221 co-sponsors on legislation to repeal the estate tax. And the superrich are hiring attorneys to construct complex trust mechanisms to circumvent the tax. In 2013, Casino mogul Sheldon Adelson used a system of trusts to funnel $8 billion in wealth to his heirs, dodging about $2.8 billion in estate taxes that would be due after his death.
A decade ago, the estate tax generated over $30 billion a year. In 2012, it generated just $8.5 billion, less than 1% of the estimated $1.2 trillion passed down to heirs that year.
Sometimes the best defense is a good offense. Today, Senator Bernie Sanders is introducing this "Responsible Estate Tax Act" which would strengthen the estate tax and plug up some of the worst "billionaire loopholes."
"Unless we reduce skyrocketing wealth and income inequality," Senator Sanders wrote in the Huffington Post, "unless we end the ability of the super-rich to buy elections, the United States will be well on its way toward becoming an oligarchic form of society where almost all power rests with the billionaire class."
An important dimension of the Responsible Estate Tax Act is that it would institute a progressive rate structure -the greater the wealth, the higher the rate. Estates under $10 million would pay the current rate of 40 percent, but larger estates would pay incrementally more. Estates over $1 billion would pay a 65 percent rate. Such a tax would truly put a brake on the concentration of wealth
The Sanders bill makes another important improvement - it would close a "billionaire's loophole" known as the Grantor Retained Annuity Trust (GRAT), which allows estates of super-wealthy to avoid the estate tax. Some billionaires using the GRAT "billionaire loophole" include Facebook's Mark Zuckerberg, Goldman Sachs CEO Lloyd Blankfein, Dish Networks' Charles Ergen, fashion designer Ralph Lauren, and multiple Walton family members.
Reducing inequality appears to be an insurmountable matter. But there are key interventions that would dramatically reduce the vicious cycle of concentrated wealth, political corruption, and a collapsing standard of living for the majority. Senator Sanders bill -the Responsible Estate Tax Act -is a handhold on this path, one of the policies we would need to institute to eliminate the grip of the super wealthy on our society.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Chuck Collins
Chuck Collins is co-founder of CARP and author of Burned by Billionaires: How Concentrated Wealth and Power are Ruining Our Lives and Planet.
French economist Thomas Piketty made a sensation with his bestselling book about inequality, Capital In The Twenty-First Century. Piketty's big solution is for nations around the world to adopt a "global wealth tax" to reverse the dizzying wealth inequalities that have emerged in the last three decades.
In the U.S., however, the most immediate action we can take to prevent the growth of a wealth aristocracy is to defend and expand our estate tax -our nation's only levy on inherited wealth. Only multi-millionaires and billionaires pay the tax, fewer than one in 500 households.
The bad news is the estate tax is under assault. Republicans in the U.S. House have 221 co-sponsors on legislation to repeal the estate tax. And the superrich are hiring attorneys to construct complex trust mechanisms to circumvent the tax. In 2013, Casino mogul Sheldon Adelson used a system of trusts to funnel $8 billion in wealth to his heirs, dodging about $2.8 billion in estate taxes that would be due after his death.
A decade ago, the estate tax generated over $30 billion a year. In 2012, it generated just $8.5 billion, less than 1% of the estimated $1.2 trillion passed down to heirs that year.
Sometimes the best defense is a good offense. Today, Senator Bernie Sanders is introducing this "Responsible Estate Tax Act" which would strengthen the estate tax and plug up some of the worst "billionaire loopholes."
"Unless we reduce skyrocketing wealth and income inequality," Senator Sanders wrote in the Huffington Post, "unless we end the ability of the super-rich to buy elections, the United States will be well on its way toward becoming an oligarchic form of society where almost all power rests with the billionaire class."
An important dimension of the Responsible Estate Tax Act is that it would institute a progressive rate structure -the greater the wealth, the higher the rate. Estates under $10 million would pay the current rate of 40 percent, but larger estates would pay incrementally more. Estates over $1 billion would pay a 65 percent rate. Such a tax would truly put a brake on the concentration of wealth
The Sanders bill makes another important improvement - it would close a "billionaire's loophole" known as the Grantor Retained Annuity Trust (GRAT), which allows estates of super-wealthy to avoid the estate tax. Some billionaires using the GRAT "billionaire loophole" include Facebook's Mark Zuckerberg, Goldman Sachs CEO Lloyd Blankfein, Dish Networks' Charles Ergen, fashion designer Ralph Lauren, and multiple Walton family members.
Reducing inequality appears to be an insurmountable matter. But there are key interventions that would dramatically reduce the vicious cycle of concentrated wealth, political corruption, and a collapsing standard of living for the majority. Senator Sanders bill -the Responsible Estate Tax Act -is a handhold on this path, one of the policies we would need to institute to eliminate the grip of the super wealthy on our society.
Chuck Collins
Chuck Collins is co-founder of CARP and author of Burned by Billionaires: How Concentrated Wealth and Power are Ruining Our Lives and Planet.
French economist Thomas Piketty made a sensation with his bestselling book about inequality, Capital In The Twenty-First Century. Piketty's big solution is for nations around the world to adopt a "global wealth tax" to reverse the dizzying wealth inequalities that have emerged in the last three decades.
In the U.S., however, the most immediate action we can take to prevent the growth of a wealth aristocracy is to defend and expand our estate tax -our nation's only levy on inherited wealth. Only multi-millionaires and billionaires pay the tax, fewer than one in 500 households.
The bad news is the estate tax is under assault. Republicans in the U.S. House have 221 co-sponsors on legislation to repeal the estate tax. And the superrich are hiring attorneys to construct complex trust mechanisms to circumvent the tax. In 2013, Casino mogul Sheldon Adelson used a system of trusts to funnel $8 billion in wealth to his heirs, dodging about $2.8 billion in estate taxes that would be due after his death.
A decade ago, the estate tax generated over $30 billion a year. In 2012, it generated just $8.5 billion, less than 1% of the estimated $1.2 trillion passed down to heirs that year.
Sometimes the best defense is a good offense. Today, Senator Bernie Sanders is introducing this "Responsible Estate Tax Act" which would strengthen the estate tax and plug up some of the worst "billionaire loopholes."
"Unless we reduce skyrocketing wealth and income inequality," Senator Sanders wrote in the Huffington Post, "unless we end the ability of the super-rich to buy elections, the United States will be well on its way toward becoming an oligarchic form of society where almost all power rests with the billionaire class."
An important dimension of the Responsible Estate Tax Act is that it would institute a progressive rate structure -the greater the wealth, the higher the rate. Estates under $10 million would pay the current rate of 40 percent, but larger estates would pay incrementally more. Estates over $1 billion would pay a 65 percent rate. Such a tax would truly put a brake on the concentration of wealth
The Sanders bill makes another important improvement - it would close a "billionaire's loophole" known as the Grantor Retained Annuity Trust (GRAT), which allows estates of super-wealthy to avoid the estate tax. Some billionaires using the GRAT "billionaire loophole" include Facebook's Mark Zuckerberg, Goldman Sachs CEO Lloyd Blankfein, Dish Networks' Charles Ergen, fashion designer Ralph Lauren, and multiple Walton family members.
Reducing inequality appears to be an insurmountable matter. But there are key interventions that would dramatically reduce the vicious cycle of concentrated wealth, political corruption, and a collapsing standard of living for the majority. Senator Sanders bill -the Responsible Estate Tax Act -is a handhold on this path, one of the policies we would need to institute to eliminate the grip of the super wealthy on our society.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.