People participate in a "march on billionaires" event on July 17, 2020 in New York City.
'We Are Not Taxing the Very Wealthy Enough': Runaway Inequality About to Get Worse
"Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure," said Sen. Elizabeth Warren.
The United States' astronomical levels of economic inequality are poised to become further entrenched in the coming years as what The New York Times described Sunday as "the greatest wealth transfer in history" gets underway, with the richest members of the Baby Boomer generation set to pass trillions of dollars in assets on to their descendants—often paying little or nothing in taxes.
"Most will leave behind thousands of dollars, a home, or not much at all. Others are leaving their heirs hundreds of thousands, or millions, or billions of dollars in various assets," the Times reported. "Of the $84 trillion projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16 trillion will be transferred within the next decade."
The newspaper added that thanks to the loophole-ridden U.S. tax system, "heirs increasingly don't need to wait for the passing of elders to directly benefit from family money, a result of the bursting popularity of 'giving while living'—including property purchases, repeated tax-free cash transfers of estate money, and more—providing millions a head start."
"The trillions of dollars going to heirs will largely reinforce inequality," the Times observed. "The wealthiest 10% of households will be giving and receiving a majority of the riches. Within that range, the top 1%—which holds about as much wealth as the bottom 90%, and is predominantly white—will dictate the broadest share of the money flow. The more diverse bottom 50% of households will account for only 8% of the transfers."
Don Moynihan, a professor at Georgetown University's McCourt School of Public Policy, argued that the Times analysis further demonstrates that "we are not taxing the very wealthy enough."
The Times noted that individuals in the U.S. can pass nearly $13 million in assets to heirs without paying the federal estate tax, which only applies to around two of every 1,000 American estates.
"As a result, although high-net-worth and ultrahigh-net-worth individuals could inherit more than $30 trillion by 2045, their prospective taxes on estates and transfers is $4.2 trillion," the Times observed.
The explosion of wealth inequality in the U.S. over the past several decades has prompted growing calls for systemic reform but little substantive action from lawmakers. In 2017, congressional Republicans and then-President Donald Trump contributed to the inequality boom by ramming through tax legislation that disproportionately benefited the wealthiest Americans.
Now in control of the U.S. House, Republicans are trying to make the Trump tax cuts for individuals permanent and eliminate the estate tax altogether—a move that would give the nation's wealthiest households another $2 trillion in tax breaks.
In April, Sen. Bernie Sanders (I-Vt.) led several of his colleagues in offering an alternative proposal: Legislation that would impose progressively higher taxes on estates worth between $3.5 million and $1 billion, as well as a 65% levy on estates worth more than $1 billion.
"At a time of massive wealth and income inequality, we need to make sure that people who inherit over $3.5 million pay their fair share of taxes," Sanders said last month. "We do not need to provide a huge handout to multi-millionaires and billionaires. It is unacceptable that working families across the country today are struggling to file their taxes on time and put food on the table, while the wealthiest among us profit off of enormous tax loopholes and giant tax breaks."
Sen. Elizabeth Warren (D-Mass.), a co-sponsor of Sanders' legislation, tweeted Monday that "Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure."
"Congressional Republicans need to get on board," the senator added.
Morris Pearl, a former managing director at the asset management behemoth BlackRock and the chair of the Patriotic Millionaires, stressed in an interview with the Times that structural changes to the U.S. tax code—not just a crackdown on wealthy tax cheats—are necessary to slow the rise of inequality.
"People are following the law just fine. I generally don't pay much taxes," said Pearl, whose group has warned that democracy "will not survive" unless the rich are taxed much more aggressively.
Stressing the ease with which rich families in U.S. are able to pass assets on to their heirs tax-free, Pearl told the Times that he currently holds stock that his wife's father, "who died a long time ago, bought in the 1970s," an investment that "has gone from a few thousand dollars to many hundreds of thousands of dollars"—unrealized capital gains that are not subject to taxation.
University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman have estimated that $2.7 trillion of the $4.25 trillion in wealth held by U.S. billionaires is unrealized.
"I've never paid a penny of taxes on all that," Pearl said of his inherited equities, "and I may not ever, because I might not sell and then my kids are going to have millions of dollars in income that's never taxed in any way, shape, or form."
We are at a crossroads
This country and this world are at a monumental crossroads. In a few short weeks, US voters will have an opportunity to beat back the forces of fascism and confront the billionaires who are rigging the economy, our media system, and our democracy, making it increasingly impossible for ordinary people to get by. We’re not just talking about the election. We’re talking about what must be done once these fascist elements are vanquished from power. We need a bolder set of solutions than what either major party has so far been willing to offer and a working-class movement ready to fight like hell for it. Trump didn't emerge from nowhere. The conditions that fueled MAGA authoritarianism were created by decades of radical neoliberal economic policies and a corrupt political system dominated by corporate interests. They slashed taxes on the super-rich, promising that the benefits would trickle down. They said giveaways to the corporate titans would make life more affordable for the rest of us. It was all bullshit. And when a bitter, betrayed populace searches for someone to blame, right-wing demagogues have little trouble finding scapegoats. People know when they're being lied to, but you won't hear any of this from the corporate media. Only independent journalism—powered and funded by people who believe in building a better world—can deliver truly trustworthy daily news. Our Fall Campaign is underway, and we need your help. To power our newsroom through the rest of the year, we need to raise $125,000 by midnight on October 31. So if you share our vision, please contribute whatever you can to sustain our work. |
The United States' astronomical levels of economic inequality are poised to become further entrenched in the coming years as what The New York Times described Sunday as "the greatest wealth transfer in history" gets underway, with the richest members of the Baby Boomer generation set to pass trillions of dollars in assets on to their descendants—often paying little or nothing in taxes.
"Most will leave behind thousands of dollars, a home, or not much at all. Others are leaving their heirs hundreds of thousands, or millions, or billions of dollars in various assets," the Times reported. "Of the $84 trillion projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16 trillion will be transferred within the next decade."
The newspaper added that thanks to the loophole-ridden U.S. tax system, "heirs increasingly don't need to wait for the passing of elders to directly benefit from family money, a result of the bursting popularity of 'giving while living'—including property purchases, repeated tax-free cash transfers of estate money, and more—providing millions a head start."
"The trillions of dollars going to heirs will largely reinforce inequality," the Times observed. "The wealthiest 10% of households will be giving and receiving a majority of the riches. Within that range, the top 1%—which holds about as much wealth as the bottom 90%, and is predominantly white—will dictate the broadest share of the money flow. The more diverse bottom 50% of households will account for only 8% of the transfers."
Don Moynihan, a professor at Georgetown University's McCourt School of Public Policy, argued that the Times analysis further demonstrates that "we are not taxing the very wealthy enough."
The Times noted that individuals in the U.S. can pass nearly $13 million in assets to heirs without paying the federal estate tax, which only applies to around two of every 1,000 American estates.
"As a result, although high-net-worth and ultrahigh-net-worth individuals could inherit more than $30 trillion by 2045, their prospective taxes on estates and transfers is $4.2 trillion," the Times observed.
The explosion of wealth inequality in the U.S. over the past several decades has prompted growing calls for systemic reform but little substantive action from lawmakers. In 2017, congressional Republicans and then-President Donald Trump contributed to the inequality boom by ramming through tax legislation that disproportionately benefited the wealthiest Americans.
Now in control of the U.S. House, Republicans are trying to make the Trump tax cuts for individuals permanent and eliminate the estate tax altogether—a move that would give the nation's wealthiest households another $2 trillion in tax breaks.
In April, Sen. Bernie Sanders (I-Vt.) led several of his colleagues in offering an alternative proposal: Legislation that would impose progressively higher taxes on estates worth between $3.5 million and $1 billion, as well as a 65% levy on estates worth more than $1 billion.
"At a time of massive wealth and income inequality, we need to make sure that people who inherit over $3.5 million pay their fair share of taxes," Sanders said last month. "We do not need to provide a huge handout to multi-millionaires and billionaires. It is unacceptable that working families across the country today are struggling to file their taxes on time and put food on the table, while the wealthiest among us profit off of enormous tax loopholes and giant tax breaks."
Sen. Elizabeth Warren (D-Mass.), a co-sponsor of Sanders' legislation, tweeted Monday that "Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure."
"Congressional Republicans need to get on board," the senator added.
Morris Pearl, a former managing director at the asset management behemoth BlackRock and the chair of the Patriotic Millionaires, stressed in an interview with the Times that structural changes to the U.S. tax code—not just a crackdown on wealthy tax cheats—are necessary to slow the rise of inequality.
"People are following the law just fine. I generally don't pay much taxes," said Pearl, whose group has warned that democracy "will not survive" unless the rich are taxed much more aggressively.
Stressing the ease with which rich families in U.S. are able to pass assets on to their heirs tax-free, Pearl told the Times that he currently holds stock that his wife's father, "who died a long time ago, bought in the 1970s," an investment that "has gone from a few thousand dollars to many hundreds of thousands of dollars"—unrealized capital gains that are not subject to taxation.
University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman have estimated that $2.7 trillion of the $4.25 trillion in wealth held by U.S. billionaires is unrealized.
"I've never paid a penny of taxes on all that," Pearl said of his inherited equities, "and I may not ever, because I might not sell and then my kids are going to have millions of dollars in income that's never taxed in any way, shape, or form."
- Opinion | We Need to Topple Wealth Supremacy | Common Dreams ›
- Opinion | Pro-Rich Tax Loopholes Are Turning the American Dream Into the American Nightmare | Common Dreams ›
- Opinion | A Proposed House Tax Break Would Help the Rich at the Expense of the Rest | Common Dreams ›
The United States' astronomical levels of economic inequality are poised to become further entrenched in the coming years as what The New York Times described Sunday as "the greatest wealth transfer in history" gets underway, with the richest members of the Baby Boomer generation set to pass trillions of dollars in assets on to their descendants—often paying little or nothing in taxes.
"Most will leave behind thousands of dollars, a home, or not much at all. Others are leaving their heirs hundreds of thousands, or millions, or billions of dollars in various assets," the Times reported. "Of the $84 trillion projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16 trillion will be transferred within the next decade."
The newspaper added that thanks to the loophole-ridden U.S. tax system, "heirs increasingly don't need to wait for the passing of elders to directly benefit from family money, a result of the bursting popularity of 'giving while living'—including property purchases, repeated tax-free cash transfers of estate money, and more—providing millions a head start."
"The trillions of dollars going to heirs will largely reinforce inequality," the Times observed. "The wealthiest 10% of households will be giving and receiving a majority of the riches. Within that range, the top 1%—which holds about as much wealth as the bottom 90%, and is predominantly white—will dictate the broadest share of the money flow. The more diverse bottom 50% of households will account for only 8% of the transfers."
Don Moynihan, a professor at Georgetown University's McCourt School of Public Policy, argued that the Times analysis further demonstrates that "we are not taxing the very wealthy enough."
The Times noted that individuals in the U.S. can pass nearly $13 million in assets to heirs without paying the federal estate tax, which only applies to around two of every 1,000 American estates.
"As a result, although high-net-worth and ultrahigh-net-worth individuals could inherit more than $30 trillion by 2045, their prospective taxes on estates and transfers is $4.2 trillion," the Times observed.
The explosion of wealth inequality in the U.S. over the past several decades has prompted growing calls for systemic reform but little substantive action from lawmakers. In 2017, congressional Republicans and then-President Donald Trump contributed to the inequality boom by ramming through tax legislation that disproportionately benefited the wealthiest Americans.
Now in control of the U.S. House, Republicans are trying to make the Trump tax cuts for individuals permanent and eliminate the estate tax altogether—a move that would give the nation's wealthiest households another $2 trillion in tax breaks.
In April, Sen. Bernie Sanders (I-Vt.) led several of his colleagues in offering an alternative proposal: Legislation that would impose progressively higher taxes on estates worth between $3.5 million and $1 billion, as well as a 65% levy on estates worth more than $1 billion.
"At a time of massive wealth and income inequality, we need to make sure that people who inherit over $3.5 million pay their fair share of taxes," Sanders said last month. "We do not need to provide a huge handout to multi-millionaires and billionaires. It is unacceptable that working families across the country today are struggling to file their taxes on time and put food on the table, while the wealthiest among us profit off of enormous tax loopholes and giant tax breaks."
Sen. Elizabeth Warren (D-Mass.), a co-sponsor of Sanders' legislation, tweeted Monday that "Americans overwhelmingly prefer raising taxes on the ultra-wealthy and huge corporations to making cuts to critical programs like healthcare, medical research, and infrastructure."
"Congressional Republicans need to get on board," the senator added.
Morris Pearl, a former managing director at the asset management behemoth BlackRock and the chair of the Patriotic Millionaires, stressed in an interview with the Times that structural changes to the U.S. tax code—not just a crackdown on wealthy tax cheats—are necessary to slow the rise of inequality.
"People are following the law just fine. I generally don't pay much taxes," said Pearl, whose group has warned that democracy "will not survive" unless the rich are taxed much more aggressively.
Stressing the ease with which rich families in U.S. are able to pass assets on to their heirs tax-free, Pearl told the Times that he currently holds stock that his wife's father, "who died a long time ago, bought in the 1970s," an investment that "has gone from a few thousand dollars to many hundreds of thousands of dollars"—unrealized capital gains that are not subject to taxation.
University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman have estimated that $2.7 trillion of the $4.25 trillion in wealth held by U.S. billionaires is unrealized.
"I've never paid a penny of taxes on all that," Pearl said of his inherited equities, "and I may not ever, because I might not sell and then my kids are going to have millions of dollars in income that's never taxed in any way, shape, or form."
- Opinion | We Need to Topple Wealth Supremacy | Common Dreams ›
- Opinion | Pro-Rich Tax Loopholes Are Turning the American Dream Into the American Nightmare | Common Dreams ›
- Opinion | A Proposed House Tax Break Would Help the Rich at the Expense of the Rest | Common Dreams ›