Activists spell out #TaxTheRich in New York City on March 4, 2021. (Photo: Erik McGregor/LightRocket via Getty Images)
Taxing Just 7 Billionaires Could Pay for Third of $3.5 Trillion Spending Package
Democrats want to spend $3.5 trillion on jobs and infrastructure. A third of that could be covered by just seven billionaires.
The collective wealth of the seven wealthiest Americans has now reached nearly $1 trillion. And these seven pay virtually nothing in income tax.
According to Forbes, the collective wealth of these seven men--Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg, Larry Page, Sergey Brin, and Larry Ellison--stood at $996 billion at the end of the day on August 25.
That's a group small enough to fit an SUV.
Think about that. Just seven guys now control about $1 trillion in wealth--that's about one-third the $3.5-trillion package now before Congress for desperately needed programs that range from dental and vision care for seniors to child tax credits for rescuing millions of families from poverty and measures that can save our burning planet from climate change.
Some vilify that social spending as "unaffordable." But it turns out that one third of the tab could be covered by the wealth of just 0.0000022 percent of the U.S. population--seven guys in one SUV.
The still deeper connection between the wealth of our "trillion-dollar seven" and that $3.5-trillion in social spending: Whether that spending becomes reality likely will hinge on the votes of so-called political moderates who insist the programs must be "paid for."
Those same moderates will hold the deciding votes on the "pay fors" advocates for the social spending are proposing: increased taxes on the country's enormously rich, including the trillion-dollar seven.
And that gets us back to how we got into this mess in the first place.
ProPublica recently exposed what many of us already suspected: Our trillion-dollar seven--and their fellow billionaires--barely pay any tax as a percentage of their true income. Between 2014 and 2018, America's 25 top billionaires paid federal income tax during that five-year period equal to just 3.4 percent of the increase in their collective wealth over that same period.
Can we change this dynamic?
Yes, but to do so, those political moderates will need to agree to end the tax-avoidance strategy--"Buy-Borrow-Die"--that allows billionaires and the merely super-rich to escape tax on the enormous gains they realize on their investments.
This scam works really quite simply. The wealthy buy an investment or--in the case of the trillion-dollar seven--found a company. Then, as their asset soars in value, they never sell. Instead, they borrow against the increased value of their asset whenever they need cash.
Finally, they die, and each death wipes off the tax liability on all the gain that's gone untaxed, sometimes for an entire adult lifetime.
What makes the Buy-Borrow-Die strategy possible? The gaping loophole in our tax law known as "stepped-up basis." Under this loophole, those who sell inherited assets get treated as if they had purchased the assets at their fair market value on the date of the deceased owner's death.
The end result: If Jeff Bezos' children inherit his Amazon stock, about $200 billion in gains will face no tax at all.
Our political leaders have been aware of the stepped-up basis loophole for decades, yet have done nothing while the super-rich have been using Buy-Borrow-Die to accumulate obscene piles of untaxed wealth.
But the Biden administration is now calling on Congress to end stepped-up basis to fund the programs we need to move our country forward. Will our lawmakers now summon the courage to tax the trillion-dollar seven?
Urgent. It's never been this bad.
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 from the outset was 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 and doing some of its best and most important work, the threats we face are intensifying. Right now, with just four days to go in our Spring Campaign, we are not even halfway to our goal. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Can you make a gift right now to make sure Common Dreams not only survives but thrives? There is no backup plan or rainy day fund. There is only you. —Craig Brown, Co-founder |
The collective wealth of the seven wealthiest Americans has now reached nearly $1 trillion. And these seven pay virtually nothing in income tax.
According to Forbes, the collective wealth of these seven men--Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg, Larry Page, Sergey Brin, and Larry Ellison--stood at $996 billion at the end of the day on August 25.
That's a group small enough to fit an SUV.
Think about that. Just seven guys now control about $1 trillion in wealth--that's about one-third the $3.5-trillion package now before Congress for desperately needed programs that range from dental and vision care for seniors to child tax credits for rescuing millions of families from poverty and measures that can save our burning planet from climate change.
Some vilify that social spending as "unaffordable." But it turns out that one third of the tab could be covered by the wealth of just 0.0000022 percent of the U.S. population--seven guys in one SUV.
The still deeper connection between the wealth of our "trillion-dollar seven" and that $3.5-trillion in social spending: Whether that spending becomes reality likely will hinge on the votes of so-called political moderates who insist the programs must be "paid for."
Those same moderates will hold the deciding votes on the "pay fors" advocates for the social spending are proposing: increased taxes on the country's enormously rich, including the trillion-dollar seven.
And that gets us back to how we got into this mess in the first place.
ProPublica recently exposed what many of us already suspected: Our trillion-dollar seven--and their fellow billionaires--barely pay any tax as a percentage of their true income. Between 2014 and 2018, America's 25 top billionaires paid federal income tax during that five-year period equal to just 3.4 percent of the increase in their collective wealth over that same period.
Can we change this dynamic?
Yes, but to do so, those political moderates will need to agree to end the tax-avoidance strategy--"Buy-Borrow-Die"--that allows billionaires and the merely super-rich to escape tax on the enormous gains they realize on their investments.
This scam works really quite simply. The wealthy buy an investment or--in the case of the trillion-dollar seven--found a company. Then, as their asset soars in value, they never sell. Instead, they borrow against the increased value of their asset whenever they need cash.
Finally, they die, and each death wipes off the tax liability on all the gain that's gone untaxed, sometimes for an entire adult lifetime.
What makes the Buy-Borrow-Die strategy possible? The gaping loophole in our tax law known as "stepped-up basis." Under this loophole, those who sell inherited assets get treated as if they had purchased the assets at their fair market value on the date of the deceased owner's death.
The end result: If Jeff Bezos' children inherit his Amazon stock, about $200 billion in gains will face no tax at all.
Our political leaders have been aware of the stepped-up basis loophole for decades, yet have done nothing while the super-rich have been using Buy-Borrow-Die to accumulate obscene piles of untaxed wealth.
But the Biden administration is now calling on Congress to end stepped-up basis to fund the programs we need to move our country forward. Will our lawmakers now summon the courage to tax the trillion-dollar seven?
The collective wealth of the seven wealthiest Americans has now reached nearly $1 trillion. And these seven pay virtually nothing in income tax.
According to Forbes, the collective wealth of these seven men--Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg, Larry Page, Sergey Brin, and Larry Ellison--stood at $996 billion at the end of the day on August 25.
That's a group small enough to fit an SUV.
Think about that. Just seven guys now control about $1 trillion in wealth--that's about one-third the $3.5-trillion package now before Congress for desperately needed programs that range from dental and vision care for seniors to child tax credits for rescuing millions of families from poverty and measures that can save our burning planet from climate change.
Some vilify that social spending as "unaffordable." But it turns out that one third of the tab could be covered by the wealth of just 0.0000022 percent of the U.S. population--seven guys in one SUV.
The still deeper connection between the wealth of our "trillion-dollar seven" and that $3.5-trillion in social spending: Whether that spending becomes reality likely will hinge on the votes of so-called political moderates who insist the programs must be "paid for."
Those same moderates will hold the deciding votes on the "pay fors" advocates for the social spending are proposing: increased taxes on the country's enormously rich, including the trillion-dollar seven.
And that gets us back to how we got into this mess in the first place.
ProPublica recently exposed what many of us already suspected: Our trillion-dollar seven--and their fellow billionaires--barely pay any tax as a percentage of their true income. Between 2014 and 2018, America's 25 top billionaires paid federal income tax during that five-year period equal to just 3.4 percent of the increase in their collective wealth over that same period.
Can we change this dynamic?
Yes, but to do so, those political moderates will need to agree to end the tax-avoidance strategy--"Buy-Borrow-Die"--that allows billionaires and the merely super-rich to escape tax on the enormous gains they realize on their investments.
This scam works really quite simply. The wealthy buy an investment or--in the case of the trillion-dollar seven--found a company. Then, as their asset soars in value, they never sell. Instead, they borrow against the increased value of their asset whenever they need cash.
Finally, they die, and each death wipes off the tax liability on all the gain that's gone untaxed, sometimes for an entire adult lifetime.
What makes the Buy-Borrow-Die strategy possible? The gaping loophole in our tax law known as "stepped-up basis." Under this loophole, those who sell inherited assets get treated as if they had purchased the assets at their fair market value on the date of the deceased owner's death.
The end result: If Jeff Bezos' children inherit his Amazon stock, about $200 billion in gains will face no tax at all.
Our political leaders have been aware of the stepped-up basis loophole for decades, yet have done nothing while the super-rich have been using Buy-Borrow-Die to accumulate obscene piles of untaxed wealth.
But the Biden administration is now calling on Congress to end stepped-up basis to fund the programs we need to move our country forward. Will our lawmakers now summon the courage to tax the trillion-dollar seven?