Politics Opinion: America's tax system is rigged to protect the rich and powerful
Top 100 NFL Players of 2021: Patrick Mahomes holds on to No. 1 spot, Josh Allen rockets into top 10
Only four players from Pete Prisco's 2020 list remain in the top 10, while one fell more than 60 spotsNow it's more than ever. It's why they are pushing back against their employers, with quarterbacks like Aaron Rodgers, Russell Wilson and Deshaun Watson all hinting that playing for another team might be a good option.
The US tax system is rigged, and it is breaking the country in more ways than one. Much of the Republican Party lives and breathes to protect the rich and powerful from paying taxes, and Democrats like Sen. Joe Manchin of West Virginia too often side with them. Meanwhile, public opinion --higher taxes on wealthy Americans and corporations -- counts for little because the rich have undue influence over the political class.
But the severity of the problem cannot be overstated. Between 2014 and 2018, Jeff Bezos, founder of Amazon, saw his wealth grow $99 billion (to the level oftoday) while paying a pittance in income taxes, according to published by ProPublica, which revealed several of America's best-known billionaires paid similarly little in taxes. (Bezos' personal and corporate representatives declined to receive detailed questions on the ProPublica story.)
Biden's confiscatory tax plans unleash class warfare
Confiscatory tax policies make citizens worse off overall in the name of redistributing resources from the wealthy to the poor. But they ignore the fact that the taxes are imposed on those responsible for the investment that creates jobs. The new administration and its allies in Congress are trying to use the politics of envy and class warfare to argue that low- and middle-income can get ahead only with massive redistribution by the government, instead of economic growth spurred by a dynamic private economy driven by free choice.
Not only is our tax system not collecting taxes from America's richest individuals -- it's designed not to do so. Suppose that in a given year Bezos' shares rise by $20 billion and, instead of selling those shares, he borrows $1 billion against them to fund his luxurious consumption. He won't owe or pay a penny of income tax.
At a conceptual level, Bezos' income in this example is $20 billion, measured by the change of wealth. Yet according to the tax code, his taxable income is $0, because his rise of wealth is counted as taxable income only when he sells the shares. But why should he sell them when he can pay for hisand other toys by borrowing -- and thereby escape income taxes altogether?
An effective and politically viable option for corporate tax reform
Together with a 25 percent corporate tax rate, the Biden administration should adopt the 15 percent corporate minimum tax rate coming out of the G-7 meeting, instead of the proposed 21 percent minimum rate. The 15 percent minimum rate is likely to attract broader support from the G-20 finance ministers, who meet later this summer. Moreover, if most industrialized countries adopt a minimum 15 percent rate, then American companies would be at a competitive disadvantage with a 21 percent U.S. minimum rate. In sum, Congress should pass a 25 percent corporate tax rate with a 15 percent minimum tax on foreign profits of U.S.
By the way, if Bezos actually sells some shares after owning them for more than one year, he would pay a" of 20%, below the rate on wage income paid by an individual earning $41,000!
There are actually four interconnected ways that the tax code is designed by and for the rich. The first is the case just noted, by which the richest Americans amass and spend great wealth while paying little or no tax. The applicable rules are that "unrealized capital gains" (that is, price increases on unsold assets) are generally not taxable income, and that long-term capital gainsat a low rate.
The second problem is when companies park their assets and international profits in tax havens. As of 2018, according to the, American multinational companies held an astonishing $1.3 trillion of corporate assets in Bermuda and another $1 trillion in a few tiny British islands in the Caribbean, including the British Virgin Islands and the Cayman Islands. Notably, these tiny places corporate tax rate.
Biden’s Biggest Danger is Congressional Democrats Afraid to Tax the Rich
Behind the scenes, Democrats are knifing the administration’s legacy.It seems those haughty fat cats, so confident they could easily work their will in Congress … were absolutely correct. The pushback has operated largely behind the scenes, but evidence of its effectiveness has popped up primarily in reports targeted at the inside-Washington audience. Farm-state Democrats in the House are openly protesting Biden’s measure to close a huge capital-gains-tax loophole. Biden’s plan “seems like a rather high rate to me,” said Senator Bob Menendez of New Jersey.
How can more than $2 trillion of corporate assets andof net income end up in these British islands when US companies hardly operate, produce, manufacture or export from them?
A company, which parks its money offshore, simply declares that its hugely valuable intangible assets (such as trademarks, patents and other intellectual property) are actually located in the tax haven. How they got there, don't ask. When the company -- that is, the real company -- earns international profits on its actual production and sales, the real company "pays" the shell company, based in some Caribbean island, for the use of its own intellectual property.
In short, the international profits are magically assigned for tax purposes to a place with 0% corporate taxes. Lawyers actually earn high fees for facilitating this absurd tax dodge. In 2017,from a Bermuda-based law firm showed that several major tech companies were engaged in that kind of aggressive tax avoidance scheme. Though the legality of it is in question, the immorality of a tax system that allows it to happen so easily is not.
Republicans demand CRIMINAL charges for tax leaker
Senate Minority Leader Mitch McConnell is demanding a criminal investigation into the leaking of confidential tax information, insisting that whoever was responsible be imprisoned. He wants the Justice Department and FBI to investigate who released information about some of the country's wealthiest taxpayers including Jeff Bezos, Elon Musk and Warren Buffet.'Our tax returns are, by law, confidential because of just this kind of shenanigans,' he told conservative host Hugh Hewitt's radio show.'These people, ought to, whoever did this, ought to be hunted down and thrown into jail.
This trick feeds the first kind of tax dodge. Because of the tax havens, corporate share prices soar, and Bezos and friends enjoy their mega-incomes as "unrealized capital gains" without the need to pay any taxes.
The third problem is outright unaffordable tax cuts, such as the 2017 Trump-led tax lawthe statutory corporate income tax rate from 35% to 21%. That was ridiculous and unfair then -- and it remains so now. But Republicans have made crystal clear that they won't touch that cruel tax cut, which was voted on in the middle of the night of the American people.
The fourth and final problem is good old-fashioned tax evasion, which now amounts to nearlyper year. I don't suppose that many Americans are "shocked, shocked" that tax evasion at a massive scale, especially by the rich, is taking place in our hallowed democracy. According to recent estimates, the of earners account for more than a third of unpaid federal taxes. The International Revenue Service budget to audit companies and wealthy Americans over the past decade, further enabling this bad behavior.
President Joe Biden and Treasury Secretary Janet Yellen are intent on addressing these four problems. But Senate Minority Leader Mitch McConnell, Democratic Sen. Joe Manchin of West Virginia and the 49 other Republican senators stand in their way.
The Limits of Wealth-Tax Populism
Safeguarding democracy from inequality will require much more than soaking the superrich.All this has been apparent for a long time. But thanks to some public-spirited criminal with access to the closely guarded files of the IRS, the precise terms of the billionaire class’s sweetheart deal grew more visible this week. According to tax records leaked to ProPublica, between 2014 and 2018, the 25 richest Americans collectively grew $401 billion wealthier, while paying only 3.4 percent of that sum to Uncle Sam.
When Yellen recently negotiated with the other G-7 countries (Canada, France, Germany, Italy, Japan and the UK) a minimum corporate tax of at least 15%, thereby blunting the role of tax havens, the Republicans declared that it was "" and " ."
In addition, Biden and Yellenthe statutory corporate tax rate back to 28%, halfway to the pre-2017 rate, though they don't propose to tax unrealized capital gains. And they the IRS properly so that it can resume audits and crack down on tax cheats. Overall, their plan for economic growth the share of government revenues in GDP from 16.3% in 2021 to 19.9% in 2032.
The response from 50 Republican senators has been a relentless no to any tax increase on the wealthy, while Manchin hasfor a bipartisan jobs package. And you wonder about on McConnell's face.
So here we are, fellow Americans, with potholed streets, broken highways and bridges, poisoned urban water systems, poor connectivity, trains that crawl along, hungry Americans -- and superyachts.
Long live the Republic!
Dems start to get tax-hike anxiety .
President Joe Biden’s proposed tax increases are another breed, focused on people making over $400,000 a year. His proposals are far more ambitious than the concessions Obama ended up winning after the 2012 election, which allowed the top income tax rate to rise for high earners. Many Democrats assert that they’re no longer as afraid of the comprehensive defeats they suffered when party leaders like Walter Mondale leaned into big tax hikes.