Millionaires who want to abolish extreme wealth

The extreme concentration of wealth, the millionaires point out (or admit), was not inevitable. Payne writes that “a small group of very wealthy people have spent a huge amount of money over a very long period of time to influence a political system to write tax laws to ensure that the economy brings them the best. most of his earnings “. This system means that no matter which political party is in power, expanding or recession, recession or manic bubble, the extremely wealthy are locked into their perpetual boon. Showing how close the rich are to the political process, patriotic millionaires attest to how easy it is for them to pick up the phone and speak directly with Senators.

To understand how the tax code directs money to a small group, Payne points out, we need to know that taxes are not primarily a tool to generate revenue for government spending – the federal government can spend and spend regardless. of tax collection. Taxes are a tool for restricting income, as well as for setting standards of behavior, among other things. The way we tax different activities speaks to our priorities as a society. We tax tobacco, alcohol, and gambling, for example (“sin taxes” as they are called), but most of the time we don’t tax food. New Jersey imposes a higher property tax if you have a swimming pool. Is there a strict econometric logic to this? No. Taxes exist at the crossroads of economics, politics and ethics.

Currently, our tax code is designed to concentrate wealth among a few by only slightly taxing sources of wealth. The most prominent example is the capital gains tax, which, at rates capped at 20%, is much lower than income tax. Capital gains are the income that a person earns from their investments. A practical example: In New York State, if you were to earn $ 80,000 a year in income from your job, you would pay 26% of that income in taxes, whereas if you sat all year round and earned 80,000. $ in investment income, you pay no taxes because the government does not tax the first $ 80,000 of investment income. After that amount, you would only pay up to 20% tax, a saving that becomes excess wealth. The rich hold much more of their wealth in investments, and that is why, as economists Zucman and Saez found, the poorest 10 percent of Americans pay 10 cents on the dollar in taxes, while the poorest 10 percent of Americans pay 10 cents on the dollar in taxes. richer pay 1 or 2. “Our elected officials can talk endlessly about the value of a hard day’s work and the nobility of work,” writes Payne, “but our tax code is deliberately designed to reward income. of capital in relation to labor income. This is why someone like Martha can be showered with ever greater riches without even trying.

The second important way our society is helping the extremely rich stay extremely rich, says Chuck Collins in his book The wealth accumulators, is the abuse of legal entities called trusts, which have two ruinous functions: they allow people to pass on huge packages of wealth to their families, and they obscure the true ownership of that wealth, making full taxation hopeless. . Trusts originated in England during the Crusades, to hold the assets of one person (called the settlor) by another person (the trustee) for the benefit of a third (the beneficiary). Knights traveling to the Middle East, believing they might not return for years if they returned at all, put their lands in trust while they were away until their children were old enough to take over.

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