For nearly two decades, more than two-thirds of American taxpayers have told Gallup they don’t think corporations pay their fair share in taxes. In fact, the word “taxpayers” almost categorically excludes many major multi-national corporations, along with some of the absolute wealthiest individuals in the country—not to mention the world. That list of non-taxpayers includes companies like Nike and FedEx and individuals such as Jeff Bezos and Elon Musk (as we recently found out through a blockbuster ProPublica investigation).
Anger over the nation’s stunning lack of tax equity was at a fever pitch even before the latest revelation that 25 billionaires paid the equivalent of just 3.4% on their total wealth.
In fact, just a couple months ago, Pew Research Center polling found that at least 80% of Americans said one of their biggest complaints about the federal tax system was the fact that some corporations and wealthy individuals don’t pay their fair share.
|Bothers me A lot||some||Not much||not at all|
|some corporations don’t pay their fair share||59%||22%||12%||6%|
|some wealthy people don’t pay their fair share||59%||21%||12%||7%|
The question now for President Biden and Democrats isn’t whether simply raising taxes on wealthy corporations and individuals is both fair and politically smart; it’s whether their taxation proposals go far enough to level the playing field for the undue burden middle-class and lower-income Americans are bearing.
ProPublica’s exposé proved that the outrageously rich enjoy gigantic tax advantages precisely because the IRS taxes wages rather than overall wealth, which puts regular old wage earners at an extreme disadvantage while Jeff Bezos gets off practically scot-free.
In other words, simply raising taxes on the mega-wealthy might generate revenues but it won’t do much to make the tax system more equitable. Rather, the tax system must be restructured.
One proposal already floated by Sen. Elizabeth Warren of Massachusetts would do exactly that. Warren’s wealth tax on unsold assets worth more than $50 million would both level the playing field and raise at least $3 trillion in federal revenues over a decade, according to her estimates. Warren, a member of the Senate Finance Committee, unveiled the Ultra-Millionaire Tax Act in March along with Reps. Pramila Jayapal of Washington, who sits on the House Budget Committee, and Brendan Boyle of Pennsylvania, a member of the House Ways and Means Committee.
“What this shows is, actually, it’s not that hard to value hundreds of billions of dollars of wealth and tax it on an annual basis,” Warren said.
Oh, and hey, that tax on ultra-millionaires and billionaires is also super popular with actual taxpayers. Overall, 63% of likely voters support a wealth tax, according to polling released last week from A More Perfect Union and Data for Progress. That support includes 82% of Democrats, 59% of independents, and a 45% plurality of Republicans—otherwise known as pretty damn popular.
The poll also found that 61% of likely voters favor “restoring” the corporate tax rate to 35%—the rate before Republicans slashed it to 21% in 2017. In his American Jobs Plan, Biden had originally proposed rolling back the GOP tax cut on corporations to 28% but has since dropped that number in response to the concerns of Sen. Joe Manchin of West Virginia.
But ultimately, levying a tax on the unsold assets of the mega-wealthy is among the most popular tax proposals anyone has floated to date—if not the most popular. It would also likely do more than any other proposal to equalize the tax burden among the American people.
As President Biden searches for a path forward on his signature American jobs and families plans, he has been handed a gift. Democrats should take up Warren’s wealth tax and dare Republicans and Joe Manchin alike to make their case against it. Explaining why assets worth more than $50 million shouldn’t be taxed would be a hard sell in West Virginia, which ranks dead last nationwide in the overall quality of its infrastructure.