Billionaire pandemic wealth gains are also one-half the $3.5 trillion rumored cost of the investment package that Democrats in the US Senate may put up for a vote as early as next week.
The $138 billion wealth growth of Tesla founder Elon Musk alone could cover the ten-year costs of tuition for 5.5 million community college students and feeding 29 million low-income public school kids over the summer – and still leave Musk $4 billion richer than he was before Covid.
But very little if any of that ballooning billionaire wealth will ever be put to such public use. That’s because even though such asset growth is the main source of income for the rich, under current rules almost none of that income will ever be taxed.
Americans for Tax Fairness (ATF) and the Institute for Policy Studies (IPS) have tracked the pandemic-era growth in fortune of the nation’s richest individuals since summer of 2020. This latest report covers the period March 18, 2020 through July 9, 2021. The billionaire wealth bonanza over the past 16 months is particularly shocking when contrasted with the coronavirus misery of ordinary Americans: over 83 million have lost jobs, almost 34 million have been sickened by the virus, and over 600,000 have died from it.
President Biden has proposed tax reforms that would more fairly tax the wealthy, including billionaires, and the big corporations they own through their stock holdings. Because Congressional Republicans have universally rejected such reforms – despite overwhelming public support for them – Democrats are now working out a tax-and-spending plan that can pass without GOP votes.
The virtual tax-free status of billionaire wealth growth was highlighted last month by a report from ProPublica. It revealed that 25 top billionaires paid on average only a tiny share (3.4 percent) of their wealth-growth income in federal taxes and that several, including Jeff Bezos (as of July 9 worth $212 billion) and Elon Musk (around $163 billion), went multiple recent years paying zero federal income.
Because of gaping loopholes in the tax code, increased wealth like that enjoyed by America’s billionaires and the richest one percent can go untaxed forever and even when it is taxed the rate is about half that of wage income. President Biden would end those special breaks for millionaires and billionaires as part of his plan to tax wealth and not just work.
Among Biden tax reforms that would tap some of this billionaire wealth growth are:
Raising the corporate tax rate to 28 percent (Revenue raised over 10 years: $858 billion): Corporate taxes are largely paid by the owners of corporations, which means the stockholders in the companies. Billionaires are among the wealthiest one percent that own over half of all corporate stock.
Curbing offshore corporate tax dodging ($1 trillion): Biden would raise by half the US corporate tax on the foreign profits of American firms and make it harder for corporations to game the system with phony headquarters’ shifts and accounting that exploits offshore tax havens.
Reforming the taxation of capital gains ($324 billion): Growth in wealth such as billionaires have experienced is a kind of income known as “capital gains.” That kind of income currently enjoys special tax treatment, including a nearly half-off top tax rate and the possible avoidance of all tax on a lifetime’s worth of gains. For those making over $1 million a year (which very likely includes all billionaires), Biden would end the tax-rate discount and require lifetime gains be taxed before the underlying assets are passed to the next generation. Americans wholeheartedly support Biden’s proposed tax reforms.
Excerpted: ‘Billionaire Pandemic Wealth Gain Could Pay For Biden’s American Families Plan’ Counterpunch.org
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