Date: 2024-05-18 Page is: DBtxt003.php txt00025987
TAXATION
OBNOXIOUS INEQUALITY
Robert Reich: What if We Actually Taxed the Rich?
OBNOXIOUS INEQUALITY
Robert Reich: What if We Actually Taxed the Rich?
Original article: https://www.youtube.com/watch?v=-RS_BtLB3QE
Peter Burgess COMMENTARY
Peter Burgess
Robert Reich
Apr 1, 2021
545K subscribers ... 397K views
Former Secretary of Labor Robert Reich breaks down seven ways to tax the rich and raise trillions in revenue.
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Income and wealth are now more concentrated at the top than at any time over the last 80 years, and our unjust tax system is a big reason why. The tax code is rigged for the rich, enabling a handful of wealthy individuals to exert undue influence over our economy and democracy.
Conservatives fret about budget deficits. Well, then, to pay for what the nation needs -- ending poverty, universal health care, infrastructure, reversing climate change, investing in communities, and so much more -- the super-wealthy have to pay their fair share.
Together, these seven ways of taxing the rich would generate more than $6 trillion over 10 years -- enough to tackle the great needs of the nation. As inequality has exploded, our unjust tax system has allowed the richest Americans to hoard wealth, at the expense of the rest of us.
It’s not radical to rein in this irresponsibility. It’s radical to let it continue.
Transcript Intro 0:00 Income and wealth are now more concentrated at the top 0:03 than at any time over the last 80 years, 0:06 and our unjust tax system is a big reason why. 0:10 The tax code is rigged for the rich, 0:11 enabling a handful of wealthy individuals 0:14 to exert undue influence over our economy and democracy. 0:18 Conservatives fret about budget deficits. 0:21 Well then, to pay for what the nation needs, 0:24 ending poverty, universal healthcare, infrastructure, 0:27 reversing climate change, investing in communities, 0:30 so much more, 0:31 the super wealthy have to pay their fair share.
REPEAL THE TRUMP TAX CUTS
It's no secret Trump's giant tax cut was a giant giveaway to the rich.
0:49 65% of its benefits go to the richest fifth.
0:52 83% to the richest 1% over a decade. 0:56
In 2018, for the first time on record, 0:58 the 400 richest Americans paid a lower effective tax rate 1:02 than the bottom half. 1:04
Repealing the Trump tax cuts' benefits 1:06 to the wealthy and big corporations 1:08 will raise an estimated $500 billion over a decade.
RAISE THE TAX RATE ON THOSE AT THE TOP
1:17 In the 1950s, the highest tax rate 1:20 on the richest Americans was over 90%. 1:23 Even after tax deductions and credits, 1:26 they still paid over 40%. 1:28 But since then, tax rates have dropped dramatically. 1:32 Today, after Trump's tax cuts, 1:34 the richest Americans pay less than 26%, 1:38 including deductions and credits. 1:40 And this rate applies 1:41 only to dollars earned in excess of $523,601. 1:47 Raising the marginal tax rate 1:48 by just 1% on the richest Americans 1:52 would bring in an estimated $123 billion over 10 years. A WEALTH TAX ON THE SUPER-WEALTHY 2:02 Wealth is even more unequal than income. 2:12 Just during the pandemic, 2:13 America's billionaires added $1.3 trillion 2:17 to their collective wealth. 2:19 Elizabeth Warren's proposed wealth tax 2:22 would charge 2% on wealth over $50 million 2:26 and 3% on wealth over $1 billion. 3% ON WEALTH OVER $1 BILLION 2:30 It would only apply to about 75,000 U.S. households, 2:34 fewer than one-tenth of 1% of taxpayers. 2:37 Under it, for example, 2:38 Jeff Bezos would owe $5.7 billion 2:42 out of his $185 billion fortune. 2:51 The wealth tax would raise $2.75 trillion over a decade, 2:57 enough to pay for universal childcare 3:00 and free public college, with plenty leftover. A TRANSACTIONS TAX ON TRADES OF STOCK 3:12 A tiny one-tenth of 1% tax on financial transactions, 3:17 just $1 per $1,000 traded 3:21 would raise $777 billion over a decade. 3:25 That's enough to provide housing vouchers 3:27 to all homeless people in America more than 12 times over. END THE STEPPED-UP COST BASIS LOOPHOLE 3:36 The heirs of the super-rich pay zero capital gains taxes 3:40 on huge increases in the value of what they inherit 3:43 because of a loophole called the stepped-up basis. 3:46 At the time of death, 3:48 the value of assets is stepped-up 3:50 to their current market value. 3:52 So a stock that was originally valued 3:55 at say, $1 when purchased, 3:57 but that's worth $1,000 when heirs receive it 4:01 escapes $999 of capital gains tax. 4:05 This loophole enables huge 4:06 and growing concentrations of wealth 4:09 to be passed from generation to generation 4:12 without ever being taxed. 4:13 Eliminating this loophole 4:16 would raise $105 billion over a decade. CLOSE OTHER LOOPHOLES FOR THE SUPER-RICH 4:23 For example, one way the managers of real estate, 4:27 venture capital, private equity and hedge funds 4:31 reduce their taxes is the carried interest loophole, CARRIED INTEREST LOOPHOLE 4:35 which allows them to treat their income as capital gains 4:40 rather than ordinary wage income. 4:42 That means they get taxed at the lower capital gains rate 4:45 rather than the higher tax rate on incomes. 4:49 Closing this loophole is estimated to raise $14 billion 4:54 over a decade. FUND THE IRS 4:59 Because the IRS has been so underfunded, 5:02 millionaires are far less likely to be audited 5:05 than they used to be. 5:06 As a result, the IRS fails to collect a huge amount of taxes 5:10 from the wealthy. 5:11 Collecting all unpaid federal income taxes 5:14 from the richest 1% 5:16 would generate at least $1.75 trillion over the decade. 5:22 So fully fund the IRS. 5:24 Together, these seven ways of taxing the rich 5:28 would generate more than $6 trillion over 10 years, 5:32 enough to tackle the great needs of the nation. 5:34 As inequality has exploded, 5:37 our unjust tax system has allowed the richest Americans 5:40 to cheat their way out of paying their fair share. 5:43 It's not radical to rein in this irresponsibility. 5:48 It's radical to let it continue.